[48] SWISS FIRM PLEADS GUILTY TO VIOLATING U.S. LAW IN OIL-FOR-FOOD
SALES

The EU-Russia summit ended in Sochi on May 25 without any agreement on
energy-related issues, including the EU's demand that Russia ratify the
Energy Charter that would end Gazprom's monopoly over Russia's pipeline
system, Russian and international media reported (see "RFE/RL
Newsline," April 26, and May 24 and 25, 2006). President Vladimir Putin
repeated his earlier charge that the EU uses double standards by
seeking access to Russia's domestic market while being reluctant to
allow Gazprom to acquire assets in EU countries. "If our European
partners expect that we will let them into the holy of holies of our
economy -- the energy sector -- and let them in as they would like to
be admitted, then we expect reciprocal steps in the most crucial and
important areas for our own development," Putin said. He nonetheless
added that "the most important thing is that we have a desire to agree
on this issue, and we will reach an agreement." PM

Chancellor Wolfgang Schuessel of Austria, which holds the rotating EU
chair, spoke in Sochi on May 25 of a mutual desire to "avoid further
misunderstandings" on energy-related issues, international media
reported. EU High Representative for Common Foreign and Security Policy
Javier Solana spoke of unspecified European "sensitivities" regarding
Russia's reliability as an energy supplier, but noted that Russia has
honored its commitments in the past. Meanwhile, the summit yielded one
agreement to facilitate granting multiple-entry and long-term Schengen
EU visas for Russian students, scholars, politicians, diplomats, and
businessmen, and a second document on the return of migrants, the
"Frankfurter Allgemeine Zeitung" reported on May 26. PM

At the EU-Russia summit in Sochi on May 25, President Putin made his
first public response to recent criticism of Russian policies by U.S.
Vice President Richard Cheney, Interfax reported (see "RFE/RL
Newsline," May 10 and 23, 2006). Putin said that "the United States is
one of our biggest partners. We value our relations with this country."
He noted that "there are many...spheres, including the antiterrorist
struggle, where nothing can substitute for the Russian-American
partnership." Asked by reporters about Cheney's criticism of Russian
policies toward Ukraine and some other countries, Putin replied, "As
for our relations with other countries, we will discuss them directly
with those countries." He added that Russia sees "how the United States
defends its interests and what methods it uses." Putin argued that
Russia similarly "searches for the most acceptable ways of solving its
national tasks. I find it strange that someone can misunderstand this."
He also said that "if our Ukrainian partners say they are satisfied
with energy agreements with Russia and see them as not just acceptable
but as the only right solution, then how can the leaders of other
countries say that this is bad?" PM

President Putin recently told Russian officials to lower the threshold
for energy and minerals deposits to be considered "strategic", thereby
raising the bar for foreign firms to enter those sectors, Reuters
reported on May 25, citing the Moscow daily "Vedomosti." The daily
wrote that the Natural Resources Ministry is preparing a new Law on
Subsoil Use that will reduce by 50 percent the threshold for oil fields
to 50 million tons (366,000 barrels) and to 500 billion cubic meters
for gas. The paper said that Rosneft and Gazprom want to maintain their
control over Russia's main oil and gas fields and are behind Putin's
recent order. PM

According to London's "Financial Times" of May 25, Russia's Natural
Resources Ministry wants a review of existing deals on natural
resources, which will affect the two largest foreign oil projects in
that country. The ministry will reportedly call for a parliamentary
review of "ineffective" agreements dating from the 1990s that might be
counter to Russian national interests. Such a move would affect
primarily the Sakhalin-1 project, on which ExxonMobil and its partners
have already spent nearly $5 billion, and the Sakhalin-2 project, in
which Royal Dutch Shell and its partners are investing $20 billion, the
daily added. It commented that "all this is taking place against the
background of the state's growing role in the energy sector and its
apparent readiness to use it as a foreign-policy tool." PM

The Arcelor SA steel company announced in Luxembourg on May 26 that it
will merge with Russia's Severstal to form the world's largest steel
company and thereby fend off Mittal Steel's hostile takeover bid, dpa
reported. The agency added that President Putin has already agreed to
the merger, which is expected to be completed in July. Arcelor's
shareholders are to own 68 percent of the merged company. PM

The authorities in Irkutsk Oblast approved on May 24 a new route for
the recently launched East Siberia-Pacific Ocean oil pipeline project,
which will transport oil from eastern Siberian fields to Japan and
South Korea, with an eventual extension to China, "Nezavisimaya gazeta"
reported on May 25 (see "RFE/RL Newsline," March 21 and 22, and April
26 and 28, 2006). In keeping with a recent order by President Putin,
the new route will stay well clear of Lake Baikal, which the original
plan did not. In April, Putin said that the pipeline must remain at
least 40 kilometers away from the lake, and the new route stays clear
of it by 400 kilometers. The pipeline now will run from Tayshet to
Ust-Kut as originally planned. It will then head northeast away from
Lake Baikal toward Lensk in Yakutia, and then southeast to the Tynda
region before going on to the Pacific. PM

About 300 people demonstrated on May 25 in Naryan-Mar, the capital of
the Nenets Autonomous Okrug in the Arctic, on behalf of Governor
Aleksei Barinov, who was recently arrested on corruption charges, "The
Moscow Times" reported on May 26 (see "RFE/RL Newsline," May 22, 24,
and 25, 2006). Many suspect that the authorities' real objections to
Barinov are political and note that he was the last governor to be
democratically elected before President Putin began directly appointing
such officials. Barinov has called for Severnaya Neft, which is a
subsidiary of the state-owned oil major Rosneft, to pay $33 million in
back taxes. The Moscow-based daily suggested that Barinov thereby ran
afoul of Igor Sechin, who is Rosneft's chairman and deputy head of
administration in the Kremlin, and has ties to the former KGB (see
"RFE/RL Russian Political Weekly," February 20, 2006). PM

Prosecutors have charged Konstantin Bochkaryov, who is deputy governor
of Chelyabinsk Oblast, with corruption in relation to an alleged
illegal purchase of art objects to decorate a public building,
RIA-Novosti reported from Yekaterinburg on May 25 (see "RFE/RL Russian
Political Weekly," October 10, 2003). PM

The Vologda Oblast Court on May 25 overturned an earlier decision by
the Vologda City Court against Anna Smirnova, who is editor in chief of
the small weekly "Nash region," Interfax reported. Smirnova hailed the
latest ruling, saying that it was unexpected and shows that the oblast
court is "professional and unbiased." Smirnova was charged with
inciting national, racial, and religious hatred in connection with a
February article entitled "The Cartoon War: Viewpoints," which was
accompanied by the Danish cartoons depicting the Prophet Muhammad (see
"RFE/RL Newsline," February 17 and 21, and April 5, 2006). On April 4,
the Moscow-based daily "Novye izvestia" commented that an official
campaign against "fascism" and hate crimes is under way in order to
channel political protests so that they do not focus on the
authorities, and to present President Putin's Unified Russia party in a
favorable light. PM

Members of the Russian human rights center Memorial and the
Grozny-based committee Civic Assistance (Grazhdanskoye Sodeystviye)
staged a protest on May 25 in central Grozny against the abduction last
month of Civic Assistance staffer Bulat Chilayev, Russian media
reported. The protesters called on the pro-Moscow Chechen leadership to
investigate Chilayev's disappearance, for which they believe an officer
of the Zapad battalion commanded by Said-Magomed Kakiyev was
responsible. LF

Khazret Sovmen met on May 25 in Maikop with representatives of the
Shapsug community from neighboring Krasnodar Krai, caucasustimes.com
reported. The Shapsugs expressed gratitude for 500,000 rubles ($18,513)
he donated to help finance the publication of the newspaper
"Shapsugiya." That paper was first published 15 years ago and currently
appears twice a month in a print run of 3,700, according to an article
by its editor Anzor Nibo on the heku.ru website. The Shapsugs are a
tiny ethnic group, numbering approximately 10,000, related to the Adygs
(Cherkess); they speak a dialect of Adyg. LF

Meeting in Nalchik on May 25, 220 delegates from 26 Balkar villages
established the Council of Elders of the Balkar People, kavkaz.memo.ru
and regnum.ru reported. The Council elected retired police Colonel
Ismail Sabanchiyev as its chairman, and adopted a resolution listing
the problems the Balkar people face. The resolution has been sent to
the republic's leadership, which ignored an invitation to send a
representative to the congress. LF

Ten of the 11 deputies who earlier this month defected from the Orinats
Yerkir faction of then-parliament Chairman Artur Baghdasarian have
formally aligned in a new group named Gorartsar (Business), Noyan Tapan
reported on May 25. The group's head, restaurant owner Grigor
Margarian, told journalist it will focus primarily on economic issues
and hopes to maintain "normal good-neighborly relations" with the
parliament factions of the parties aligned in the coalition government.
LF

The French, Russian, and U.S. co-chairmen of the OSCE Minsk Group,
accompanied by senior diplomats from the three countries, met in
Yerevan on May 25 with Armenian President Robert Kocharian and Foreign
Minister Vartan Oskanian to discuss the ongoing search for a solution
to the Karabakh conflict, Noyan Tapan and RFE/RL's Armenian Service
reported. In a subsequent statement, the co-chairs said the talks
focused on unspecified "important aspects" of a peace settlement. As in
a statement issued the previous day in Baku, they stressed the need for
"the two sides to reach agreement on the basic principles of a
settlement," and they urged the presidents of Armenia and Azerbaijan to
prepare the populations of their respective countries for peace, not a
new war (see "RFE/RL Newsline," May 25, 2006). A spokesman for
Kocharian told RFE/RL that the Armenian president will meet with his
Azerbaijani counterpart Ilham Aliyev in Bucharest on June 5 on the
sidelines of a summit of the Black Sea Economic Cooperation
Organization. LF

Mikheil Saakashvili told the Russian news agency RIA Novosti in a May
25 interview that he wants to resume high-level meetings with Russian
politicians with the aim of defusing tensions in bilateral relations.
He said that Russia could "win Georgia's heart forever" by helping to
resolve the conflicts in Abkhazia and South Ossetia, conflicts he said
were exacerbated by the "totally wrong approach" adopted by both Russia
and the United States. Saakashvili also again implied that Georgia
might opt to leave the CIS, saying the government has not yet found any
cogent reasons not to do so. He also ruled out pre-term presidential
elections in Georgia, Caucasus Press reported. Some 2,000 people
attended an opposition demonstration in Tbilisi on May 25 to protest
deteriorating economic conditions and demand Saakashvili's resignation,
"The Moscow Times" reported on May 26. LF

Robert Simmons, the NATO secretary-general's special representative for
the South Caucasus and Central Asia, said in Tbilisi on May 25 that
Georgia has made "significant progress" over the past six months in
implementing the defense and security reforms outlined in its
Individual Partnership Action Plan (IPAP), Caucasus Press and RFE/RL's
Georgian Service reported. At the same time, he warned that there is no
consensus within NATO that Georgia is ready to advance from the IPAP to
an Intensified Dialogue, which is regarded as the precursor to a
Membership Action Plan and formal invitation to join the alliance.
Simmons also implied that Georgia should not expect to receive such a
formal invitation at the NATO summit in Riga this fall. He expressed
support and approval of Georgian initiatives to resolve peacefully the
conflicts with the breakaway republics Abkhazia and South Ossetia. LF

The Georgian Foreign Ministry sent a formal protest note on May 25 to
its Russian counterpart demanding an explanation for statements by
senior Russian officials implying that Moscow would grant political
asylum to former Georgian National Security Minister Igor Giorgadze if
he requested it, Caucasus Press reported. Giorgadze, who is wanted in
Georgia on suspicion of having masterminded the August 1995 car-bomb
attack on then-Georgian parliament Chairman Eduard Shevardnadze, told
journalists shortly after arriving in Moscow on May 24 he has no
intention of requesting asylum in Russia. Speaking in Tbilisi on May
25, Georgian New Conservatives (aka New Rightists) leader David
Gamkrelidze compared Giorgadze to Osama bin Laden and said he should be
sentenced in absentia, Caucasus Press reported. LF

Oil pumped from Kazakhstan has reached China through a 962-kilometer
pipeline linking the two countries, China's "People's Daily" reported
on May 25. The event marks the first direct pipeline import of oil to
China. Yin Juntai, deputy general manager of China Petroleum
Exploration and Development Company, commented that the pipeline, which
was completed in November, "has provided a direct link between
Kazakhstan's rich oil resources and China's robust oil consumer
market." The $700 million pipeline will eventually transport 20 million
tons of oil a year to China. The "People's Daily" report said that
China's oil imports from Kazakhstan are expected to total 4.75 million
tons in 2006. DK

Former Kyrgyz President Askar Akaev told RIA-Novosti on May 25 that
reports he has returned to Bishkek are the "machinations of
ill-wishers." Responding to unconfirmed Internet reports that he has
returned to Bishkek, Akaev said: "If snow falls in the summer in
Kyrgyzstan, it's Akaev's fault. I'm an easy target for all manner of
insinuations." Akaev said that he is currently in St. Petersburg,
Russia for an academic conference, adding, "I've left politics and
immersed myself entirely in science." DK

Nurlan Motuev, who gained fame in Kyrgyzstan for seizing the Kara-Keche
coal mine in Naryn Province in 2005 and holding it for over a year, has
been charged with unlawful property seizure and tax evasion, RFE/RL's
Kyrgyz Service reported on May 25. Motuev was arrested in Bishkek on
May 23 (see "RFE/RL Newsline," May 24, 2006). DK

President Kurmanbek Bakiev has issued a decree removing Sultan Kurmanov
as commander of Kyrgyzstan's National Guard and replacing him with
Asanbek Alymkojoev, Kabar reported on May 25. Alymkojoev commanded the
Defense Ministry's southern military group in 2004-06, Interfax
reported. DK

Heads of government from the member states in the CIS met in Dushanbe
on May 25, agencies reported. Tajik Prime Minister Oqil Oqilov said
that integration is lacking among CIS countries, Asia Plus-Blitz
reported. Georgian Deputy Prime Minister Giorgi Baramidze said that CIS
membership has not helped Georgia with the peaceful settlement of
conflicts, free movement of Georgian citizens, or economic relations,
Avesta reported. "There is no point for us to remain in this
organization," Baramidze commented. Ukrainian Deputy Prime Minister
Yuriy Melnik said his country is "not talking about" leaving the CIS,
according to RFE/RL's Tajik Service reported, adding, "What we are
saying is that the [CIS] structure should have clear priorities and has
to be reformed." RFE/RL's Tajik Service reported that Georgia and
Ukraine did not sign any of the documents approved by other
participants at the meeting on May 25. DK

Tajikistan and Uzbekistan joined the Asian Cooperation Dialogue (ACD)
at a meeting of foreign ministers from ACD member states in Doha, Qatar
on May 24, uzreport.com reported the next day. The organization, which
now brings together 30 countries, is a forum for Asian states to
discuss ways to realize their potential. The Qatar meeting focused on
energy cooperation and ended with a declaration to use the ACD as a
forum for coordinating energy cooperation, UPI reported. DK

Prosecutors in Tashkent told RIA Novosti on May 25 that they have
opened a criminal case against the employees of the U.S.-based NGO
Counterpart International. The report did not say how many employees
are implicated in the criminal case. Prosecutors told the news agency,
"The criminal case was opened in connection with the [Counterpart
International] office's engaging in publishing activity without a
license." A court in Tashkent ruled in early May to shut down
Counterpart International's operations in Uzbekistan (see "RFE/RL
Newsline," May 5, 2006). A press release published on the
organization's website on May 8 quoted Lelei LeLaulu, president of
Counterpart International, as saying, "We have no option but to abide
by the ruling of the court and begin dissolving relevant programs in
Uzbekistan." DK

Belarusian Foreign Ministry spokesman Andrey Papou confirmed on May 25
that the Belarusian government will suspend overfly rights for Canadian
and U.S. airplanes, Reuters and Belapan reported. Papou noted that the
move is in response to last month's refusal by Canada and the United
States to refuel a plane carrying Belarus's prime minister to and from
Cuba (see "RFE/RL Newsline," April 21, 2006). "Belarus strictly
observes symmetry in adopting any sort of retaliatory measures. These
restrictions will apply only to two countries -- the United States and
Canada," Papou told journalists. He did not clarify whether the ban
will affect both official and commercial flights or just the former.
President Alyaksandr Lukashenka alluded to the introduction of such a
ban two days earlier (see "RFE/RL Newsline," May 24, 2006). JM

The district court in Shchuchyn, Hrodna Oblast, on May 25 began the
trial of Syarhey Lyashkevich, who led opposition presidential candidate
Alyaksandr Milinkevich's election campaign in the area, Belapan and
RFE/RL's Belarus Service reported. Prosecutors have demanded a
six-month jail sentence for Lyashkevich, claiming that he instructed
opposition activists during the campaign to stage riots by showing them
videos, talking about rallies and demonstrations, and asking them to
distribute wallet-size calendars, booklets, and other materials in
support of Milinkevich. The prosecutors presented a videotape that
Lyashkevich allegedly used to train rioters. The videotape turned out
to be a musical film titled "An Extraordinary Concert," which shows
onstage performances by Belarusian pop stars mixed with footage of
clashes between opposition protesters and police between 1996 and 2000.
"This is an unequivocally political trial; it was opened [deliberately]
in Shchuchyn because it is the place where I come from. This is a show
trial, reminiscent of those in the Soviet Union in the 1930s,"
Milinkevich told RFE/RL after attending the hearings. JM

Roman Bezsmertnyy, head of the Our Ukraine parliamentary caucus, said
in a television interview on May 25 that coalition talks between Our
Ukraine, the Yuliya Tymoshenko Bloc, and the Socialist Party over the
next two weeks will touch upon "the entire set of parliamentary and
governmental posts," the "Ukrayinska pravda" website
(http://www.pravda.com.ua) reported. "I agree with my colleagues,
Oleksandr Moroz and Yuliya Tymoshenko, who said today that the main
thing is not posts, but principles," Bezsmertnyy added. He explained
that in forming the coalition, Our Ukraine will insist on the principle
that "all decisions should be made within the framework of the
coalition." "The second principle is obligatory control and
counterbalances. That is, if the [parliamentary] committee for economic
policy belongs to one faction, the post of economy minister belongs to
another," Bezsmertnyy said. Meanwhile, the daily "Ukrayina moloda"
wrote on May 26 that Our Ukraine is going to propose Petro Poroshenko
for the post of parliament speaker, implying that the party has already
accepted the reinstatement of Yuliya Tymoshenko in the post of prime
minister. "It is interesting that Our Ukraine has not foreseen the
return of [acting Prime Minister] Yuriy Yekhanurov to the top echelons
of the executive branch," wrote "Ukrayina moloda," which is edited by
presidential adviser and close aide Mykhaylo Doroshenko. JM

Three police officers and a translator were wounded on May 25 when a
crowd of ethnic Albanians in western Kosova attacked a UN convoy
escorting a Serbian defense attorney, international news agencies
reported the same day. The attack took place in the village of Mala
Krusa, where residents blocked a road and threw stones at the convoy, a
UN statement said. "Police then had to clear the crowd, unfortunately
resulting in injuries to a number of citizens who received medical
treatment from an ambulance at the scene," Reuters quoted a UN
statement as saying. Prosecutors at the International Criminal Tribunal
for former Yugoslavia say that Serbian police killed 100 men in Mala
Krusa two days into NATO's 1999 bombing campaign. Soren
Jessen-Petersen, head of the UN Mission in Kosova, said he is "outraged
and disappointed" by the incident, Reuters reported. "It is important
for the people of Kosovo to understand that their quest for justice can
only be achieved through the course of justice, not by extrajudicial
means," he said. BW

[30] BOSNIAN COMMISSION TO INVESTIGATE ALLEGED WAR CRIMES AGAINST SERBS
IN SARAJEVO

Bosnia-Herzegovina's Prime Minister Adnan Terzic agreed on May 25 to
form a commission to investigate alleged crimes against Serbs in
Sarajevo during the 1992-95 war, international news agencies reported
the same day. The alleged atrocities were reprisal attacks that
occurred while Bosnian Serb paramilitaries were shelling the city with
artillery and conducting regular sniper attacks against its Muslim
residents. Terzic, a Muslim, previously said that he only supported the
forming of a state commission to investigate all crimes throughout the
country. As a result, Serbian lawmakers walked out of parliament in
protest (see "RFE/RL Newsline," May 25, 2006). "I have decided to roll
back on my pledge and decided that we form the commission," he said. BW

A Belgrade court on May 26 released an alleged organized-crime boss and
heroin dealer on bail and allowed him to keep his passport, dpa
reported. Sreten Jocic, known by his alias "Joca Amsterdam," was
released on 300,000-euro ($383,000) bail. Jocic is alleged to have been
one of Europe's top heroin dealers. He was arrested in Sofia in 2002 on
charges that he commissioned the murder of a rival in Belgrade.
Prosecutors objected to the release, but court officials defended the
move. "He is committed to respond to every call by the court," court
spokeswoman Ivana Ramic told the Belgrade daily "Blic," according to
dpa. BW

Negotiators in Moscow agreed on May 25 to draft a plan to resume
Moldovan wine exports to Russia, ITAR-TASS reported the same day.
Moldova-vin General Director Valeriu Mironescu announced the agreement
the same day, but did not provide further details. "The drafting will
begin when Moldova has presented a full list of measures its
authorities have taken to tighten the control of the wines' quality,"
Mironescu said, adding that he invited a group of Russian experts to
visit Moldova to look into the operation of the wine-making industry.
In a move widely viewed as political retaliation for Chisinau's
Western-leaning policies, Russia imposed a ban on Moldova's wine
exports in March, citing health and safety concerns (see "RFE/RL
Newsline," March 28, 2006). BW

The UN World Food Program (WFP) said in a statement on May 25 that an
estimated 2.7 million Afghans face possible food shortages due to a
lack of funds and resources, AFP reported. The statement said WFP's
efforts to distribute up to 25,000 tons of food in remote parts of
Afghanistan before the winter could fall short unless more
international aid is forthcoming. "The last thing WFP wants is to
cancel our winter aid program because this will leave millions of
Afghans with no hope of food assistance for months from the onset of
winter until the snows start to melt in spring," WFP regional director
for Asia Anthony Banbury is quoted as saying. "But unless donors come
forward quickly, we will soon be forced to take this tough decision
because we have so little wheat in our warehouses and almost none in
the pipeline." WFP representatives predict a shortfall of 49,000 tons
of food aid for 2006 without further donor help. The WFP planned to
distribute about 106,000 tons of food aid throughout vulnerable areas
of Afghanistan, and said an estimated $31 million is needed to shore up
the 2006 supplies. MR

Hamid Karzai called for calm during a visit to the restive south of the
country on May 25, AFP reported. "I swear to God, I'll bring security
to you," Karzai told a gathering of elders in Kandahar during a
surprise appearance. "Be relaxed and don't worry. I am working on it. I
am in talks with the international community, with Islamic countries,
with big countries," Karzai said. "Eat your shorba [a popular Afghan
gravy] and take your afternoon nap. But at the same time, take care of
the security of your villages, districts, and cities and leave the
major things for me," Karzai said he came to the area to visit the
families of civilian victims caught up in recent days of fighting in
the area, where as many as 350 people have died in clashes between
coalition forces and insurgents. Karzai hails from the Kandahar area,
which remains a hotbed of insurgent activity. MR

UN International Organization for Migration spokesman Nasim Karim said
on May 25 that some 3,000 people have fled their homes in southern
Afghanistan after days of fighting in the area, AP reported. Karim said
most of those on the move are from the Panjwayi district of Kandahar
Province, the scene of the fiercest fighting during a spate of violence
that began on May 17. Abdul Qabar Nurzai, the director of the Kandahar
office of the Afghanistan Independent Human Rights Commission, said
there are numerous reports from across southern Afghanistan of people
being uprooted because of clashes between coalition forces and
neo-Taliban insurgents. "They have lost their homes, orchards,
agricultural land, and assets, and now they are in a very bad
position," Nurzai said. MR

Police in western Afghanistan said on May 24 that they have arrested
two suspects thought to be involved in the recent killing of two UN
staffers, the Afghan Pajhwak news agency reported. Herat Governor
Sayyed Hosayn Anwari said intelligence officials detained Malvi Said
Mohammad and Mulla Najmuddin in the border region of Karukh district.
The two are thought to have been involved in the murder of two UNICEF
staffers who died on May 12 when a rocket struck their vehicle as it
traveled through Herat. Anwari said the two suspects were caught with
two rockets. MR

U.S. State Department spokesman Sean McCormack said on May 25 that
foreign ministers from the permanent Security Council member states
plus Germany will meet in Europe late next week to discuss a plan to
resolve the Iranian nuclear crisis, Reuters reported. China, France,
Great Britain, the United Kingdom, the United States, and Germany are
expected to try to work out details of incentives and disincentives
that might be offered to Iran in connection with curbing its nuclear
activities. According to "The New York Times," the White House declared
on May 24 that it is relying on the diplomatic process to resolve the
Iranian nuclear crisis, rather than entering into a direct dialogue
with the Islamic Republic. The paper quoted White House and State
Department spokesmen leaving open the possibility of direct talks in
the future. BS

The deputy commander of the Rasulallah military base in southwestern
Iran, a brigadier general identified as Rezai, announced on May 25 that
five "bandits" were killed and two others arrested in connection with a
violent attack on the Bam-Kerman road recently (see "RFE/RL Newsline,"
May 15, 2006), state television reported. Rezai said in "Iran"
newspaper on May 23 that although the police can control the roads near
the Sistan va Baluchistan Province border with Afghanistan and
Pakistan, "full control over the roads at night is not going to be
possible." Rezai claimed that all of the 100 bandit groups operating in
the region are based in other countries, and said the national police
force is seeking permission to cross into other countries while in hot
pursuit. The establishment of security in the southeast, Rezai
continued, depends on the area's economy. BS

President Mahmud Ahmadinejad said in a May 25 speech in Tehran that an
unnamed enemy is trying to undermine national unity, ILNA reported. He
added that this will not work, saying, "Today, and with total
awareness, people are thwarting the enemy plots to create ethnic
discord, and continuing their progress in maintaining their national
unity." BS

An unconfirmed report from the Turan news agency on 25 May described
"tens of thousands" of Iranians staging a protest rally in the city of
Parsabad. Turan went on to claim that security forces fired on the
demonstrators and killed four of them, after which the protesters set
several banks and schools ablaze. Those reports have not been
confirmed. The incidents are the continuation of events that began last
week in the northwest, where Azeris protested a cartoon in a government
newspaper depicting an Azeri-speaking cockroach (see "RFE/RL Newsline,"
23 and 24 May, 2006). BS

The secretary-general of Lebanese Hizballah, Seyyed Hassan Nasrallah,
acknowledged support from Iran and Syria in a May 25 speech in Tyre,
Al-Manar Television reported. The speech was given at a rally called
the "Festival of Resistance and Victory" held to commemorate the sixth
anniversary of the Israeli withdrawal from South Lebanon. Nasrallah
described the end of Israeli occupation as an event that destroyed the
"Zionists' legendary image." He noted the contribution of Hizballah
"martyrs" who gave their lives in this effort, and he also noted
"martyrs" of the Lebanese and Syrian armies, as well as Palestinian
"martyrs." Nasrallah praised Iran for its "key" role in aiding the
"resistance." "I thank especially Syria under the leadership of late
Hafiz al-Assad," he added, before citing President Bashar al-Assad, the
Syrian people, and the Syrian military. BS

Jordanian parliament speaker Abd-al-Hadi al-Majali said in Amman
recently that Iran is a threat to Jordanian security and stability,
"Al-Arab al-Yawm" reported on May 25. Iran "threatens national security
by seeking to destabilize security in Jordan rather than to overthrow
the regime," he added. Whether or not Iran is attacked -- presumably
because of its disputed nuclear program -- Jordan is in danger,
according to al-Majali. "Jordan will be harmed by Iran whether it is
hit or not," he said. Al-Majali also expressed concern about Iranian
activities in Iraq, saying, "Accurate information confirms that the
Iranian intelligence service is occupying most of southern Iraq." BS

Hassan Kazemi-Qomi, the Iranian ambassador in Baghdad, on May 25
expressed the hope that the visit of Foreign Minister Manuchehr Mottaki
will mark the beginning of a new era in Iran-Iraq relations, IRNA
reported. Kazemi-Qomi said the absence of foreign troops in Iraq is in
the interest of Iran and other countries in the region. Mottaki arrived
in Iraq on May 26, according to RFE/RL. BS

Manuchehr Mottaki arrived in Baghdad on May 26 for talks with Iraqi
officials, international media reported. Mottaki met with Foreign
Minister Hoshyar Zebari to discuss "various aspects of the bilateral
relations between the two countries and the means to promote them in
the interest of the two neighboring peoples," according to an Iraqi
Foreign Ministry statement. Mottaki is also scheduled to meet with
President Jalal Talabani and Prime Minister Nuri al-Maliki, as well as
a number of parliamentarians. Mottaki's visit is the second high-level
visit by an Iranian official to Iraq since the fall of the Hussein
regime; former Foreign Minister Kamal Kharrazi visited Iraq in May
2005. KR

[45] ARMED GROUP IN IRAQ REISSUES DEMANDS FOR RELEASE OF U.A.E.
DIPLOMAT

The Liwa Al-Islam group reissued its demands for the release of United
Arab Emirates (U.A.E.) Consul Naji Rashid on May 25, Al-Jazeera
television reported the same day. The group claimed that the U.A.E.
continues to support the Iraqi government with weapons and training to
attack the resistance. It also criticized the U.A.E. for continuing to
allow Al-Fayha satellite television to operate from Dubai. The group
called on the U.A.E. to close its embassy in Baghdad, cease all
relations with the Iraqi government, and close down Al-Fayha or else it
will kill Rashid. Meanwhile, former army Major General Nuri Ghafil
al-Dulaymi, a candidate for defense minister, has issued an appeal for
the release of Rashid, Al-Arabiyah television reported on May 25. KR

Insurgent groups in Iraq are resorting to low-tech means to communicate
in order to avoid capture by U.S. forces, "Al-Zaman" reported on May
24. Commanders of insurgent groups have instructed new recruits coming
into Iraq not to use mobile telephones, landlines, or the Internet to
communicate. The daily reported that leaflets have been circulated
among armed groups instructing them to communicate only through oral or
handwritten messages. "The U.S. Army has carried out successful raids
due to tips obtained from the Internet and mobile telephones," a source
close to an armed group said. "Al-Zaman" reported on May 22 that
insurgents in Al-Fallujah have begun targeting remote-controlled
digital cameras installed by the U.S. military in volatile areas of the
city. The cameras can monitor movement of people from 3 kilometers away
and have restricted the ability of insurgents to raid U.S. camps, the
daily reported. KR

[47] SUNNI, SHI'ITE MILITIAS ENFORCE ISLAMIC LAW IN SOME AREAS OF IRAQI
CAPITAL

Sunni and Shi'ite militias are attempting to establish separate
"Islamic emirates" in some areas of Baghdad, London-based "Al-Hayat"
reported on May 24. Abu Mus'ab al-Zarqawi's Al-Qaeda-affiliated
organization has reportedly taken over the Sunni Arab districts of
Al-Dura and Al-Amiriyah, local residents say. Each district has its own
emir, while gunmen regularly distribute leaflets written by the
Mujahedin Shura Council detailing acceptable dress and behavior.
Shi'ite militiamen have taken control of the Shi'ite districts of
Al-Sadr City, Al-Sha'b, Al-Qahira, Al-Baladiyat, and Baghdad
al-Jadidah, where they run street patrols, and inspect government
offices and girls schools for violations in dress and conduct. The
daily reported that both Sunni and Shi'ite militias have killed
violators. In Al-Amiriyah, two girls were abducted off the street and
later released with their heads shaved as punishment for not wearing
hijabs, or headscarves. Leaflets were then distributed saying that the
shavings were commuted sentences, and the next violators will be put to
death. Residents of Shi'ite districts reported similar incidents
against women and girls. KR

[48] SWISS FIRM PLEADS GUILTY TO VIOLATING U.S. LAW IN OIL-FOR-FOOD
SALES

The Swiss commodities-trading company Trafigura pleaded guilty on May
25 to violating U.S. federal law with regard to the sale of oil under
the UN-administered oil-for-food program, AP reported on May 26. The
company admitted in U.S. district court in Texas to lying to
Houston-area energy companies by saying that more than 500,000 barrels
of imported Iraqi oil was obtained in compliance with the program. The
oil was sold at two different times in 2001 along with larger shipments
that were allowed under the program. As part of a plea agreement, the
company agreed to forfeit $9.9 million, its proceeds from the sale of
the oil, and pay criminal and civil penalties amounting to another $9.9
million. KR

All seemed in order as the 450-seat Verkhovna Rada convened for its
first session on May 25, but the composure on the Ukrainian
parliamentary rostrum was short-lived. A dispute among deputies erupted
immediately after the Yuliya Tymoshenko Bloc, Our Ukraine, and the
Socialist Party -- the three allies in the 2004 Orange Revolution --
proposed that the session be postponed until June 7.

By that time, they pledged, the three groups will have agreed on the
principles of a renewed coalition. The motion eventually passed with
240 votes.

Dissent came from the ranks of the Party of Regions and the Communist
Party, whose members argued that the Orange Revolution allies have had
enough time to agree on a coalition and should allow the legislature
get to work.

The March 26 parliamentary vote in Ukraine, which was internationally
praised as fair and democratic, produced a legislature comprising five
forces: the Party of Regions (186 seats), the Yuliya Tymoshenko Bloc
(129), Our Ukraine (81), the Socialist Party (33), and the Communist
Party (21).

Over the past two months, the five parliamentary groups have held
several joint meetings chaired by President Viktor Yushchenko and many
bilateral and trilateral conferences devoted to the formation of a
parliamentary majority, but all of them proved fruitless.

In mid-April the Yuliya Tymoshenko Bloc, Our Ukraine, and the Socialist
Party signed a protocol pledging to work toward creating such a
parliamentary majority. Their subsequent efforts led to the preparation
of two draft coalition accords -- one endorsed by the Yuliya Tymoshenko
Bloc and the Socialists, the other worked out by Our Ukraine.

The main stumbling block in the coalition talks is the question of who
will become prime minister. Tymoshenko has made no secret of her desire
to regain the post she held before being dismissed by Yushchenko in
September. But the restoration of Tymoshenko as prime minister is
exactly what the president and his political partners from Our Ukraine
would like to avoid.

Yushchenko officially split with Tymoshenko after she accused some of
his closest allies of corrupt practices and of running a "second"
government. All of them were subsequently elected to the Verkhovna Rada
from the Our Ukraine list. If the former Orange Revolution allies
eventually decide to restore their coalition and Tymoshenko becomes
prime minister once again, the old conflict may reignite.

There is also another source of potential discord between the president
and Tymoshenko. Tymoshenko promised during the election campaign to
cancel a gas-supply deal that Yushchenko's cabinet signed with Gazprom
in January. The deal raised the gas price for Ukraine from $50 to $95
per 1,000 meters and gave RosUkrEnergo, an opaque Swiss-based company
owned half by Gazprom and half by two Ukrainian businessmen, the role
of sole supplier.

The cancellation by Tymoshenko of the gas deal with Gazprom could lead
to a serious conflict between Kyiv and Moscow. Russia could cut gas
supplies to Ukraine, as it did for a short time in January, or impose
trade sanctions, as it recently did with regard to Georgian and
Moldovan wines. Ukraine, which currently sends some 22 percent of its
exports to Russia, would hardly benefit from any trade ban from
Moscow.

Another hurdle to an Orange coalition is the Socialist Party's
opposition to some goals pursued by Yushchenko's presidency. In
particular, the Socialists object to Ukrainian aspirations to join
NATO. They also object to the privatization of land, thus undermining
Yushchenko's efforts to implement reforms he pledged during the 2004
Orange Revolution in an effort to bring the country closer to the
European Union.

If Our Ukraine doesn't allow Tymoshenko to realize her dream of
regaining her seat as prime minister, she will most likely switch to
the opposition, and Yushchenko will have to seek a coalition with the
Party of Regions led by Viktor Yanukovych, his former presidential
rival.

Such a coalition, with 267 votes in the Verkhovna Rada, would provide
solid support for its cabinet, provided that the two seemingly
mismatched parties could adopt a consistent program.

Both parties represent the interests of major oligarchic groups in
Ukraine, so in theory they could very easily agree on a set of basic
economic reforms. But difficulties could emerge in the determination of
foreign-policy priorities, as Yanukovych's party is generally seen as
Russia-leaning, in contrast to the Western-oriented Our Ukraine.

But for Yushchenko, this coalition option is fraught with much more
serious dangers than mere differences of opinion on foreign policy. The
Party of Regions, which won the March 26 elections, would most likely
demand the post of prime minister. It is not clear whether Yushchenko
would prefer Yanukovych or someone else from his party to Tymoshenko as
prime minister.

Under the constitutional reform that went into effect in January,
presidential powers in Ukraine were substantially reduced to the
benefit of the parliament and the prime minister. Since the Party of
Regions has many politicians with great experience in running the
government under former President Leonid Kuchma, Yushchenko might think
twice before handing the keys to the cabinet over to them. Such
experienced politicians could do more to diminish the role of the
president in practice than the constitutional reform did in theory.

Yushchenko told the Verkhovna Rada on May 25 that he expects the new
cabinet to embody his future vision for Ukraine. "The government should
be made up of those who, as a single team, will ensure Ukraine's
development on the basis of European values, who are capable of
consolidating the nation, stimulating economic reforms, and respecting
the rights and freedoms of the people," he said.

However, the president could find these goals very difficult to achieve
-- not only because of discrepancies among the potential coalition
parties but also because of the personal ambitions of their leaders.